A Requirement to Inform PPO Members of Upcoming Provider Terminations

The state legislature passed AB 2152, which would require PPOs to notify policyholders if the contract is set to terminate between their medical provider group or hospital and their insurer. The bill also requires that the Department of Insurance be notified before the contract termination, so that the Department can verify if the health insurer will continue to have an adequate network of medical providers in that geographic region to serve insureds.

The bill, authored by Assembly Member Mike Eng (D-Alhambra), has reached the Governor’s desk after the Legislature passed it during the final week of the 2011-2012 Legislative session. AB 2152 is sponsored by Commissioner Dave Jones and the California Department of Insurance. Jones said, “These important consumer protections will help prevent policyholders from unknowingly seeking medical care from a provider who may no longer be in their network patients should know whether they will be subject to higher, out-of-network costs before receiving medical treatment,” said Jones.

“This legislation erases a double standard in regulation and ensures that consumers are not blindsided by unexpectedly high medical bills because they were not notified of changes in their health insurance policies,” said Assembly Member Mike Eng.

AB 2152 requires health insurers to notify the Department of Insurance at least 30 days before terminating a provider group or hospital contract. The bill also requires health insurers to send a written notice to policyholders at least 10 days before the termination of certain provider group and hospital contracts. This protection is already provided to HMO enrollees, but not to PPO enrollees.

Last Updated 05/25/2022

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